Demand for homes accounts for the greatest one-month sales volume in five years and drives housing inventory to a 10-year low
August marked the 15th consecutive month of positive home sales across the greater Houston area, with single-family homes selling at the greatest one-month volume since August 2007. Buyers gobbled up enough properties to drive inventory down to a level last seen more than 10 years ago.
According to the latest monthly data prepared by the Houston Association of REALTORS® (HAR), single-family home sales jumped 20.0 percent compared to August 2011. Contracts closed on 6,600 homes in August, sending inventory falling to 4.9 months.
“August rounds out an extremely prosperous summer for the Houston real estate market,” said Wayne A. Stroman, HAR chairman and CEO of Stroman Realty. “As we saw in July, homes sold well in every pricing category, but particularly the higher end, which contributed to another boost in home prices. Further growth in local employment and low interest rates continue to make Houston attractive to home buyers.”
The single-family home average price increased 4.0 percent year-over-year to $224,464, the highest level for an August in Houston. The median price—the figure at which half of the homes sold for more and half sold for less—rose 3.8 percent to $165,000, also a record high for an August in Houston.
Foreclosure property sales reported in the Multiple Listing Service (MLS) declined 4.2 percent compared to August 2011. Foreclosures made up 16.8 percent of all property sales, which is consistent with levels observed over the past few months. The median price of August foreclosures was flat at $80,000.
August sales of all property types in Houston totaled 7,814, a 20.5 percent increase compared to August 2011. Total dollar volume for properties sold during the month leapt 26.3 percent to $1.7 billion versus $1.3 billion a year earlier.
August Monthly Market Comparison
August brought Houston’s overall housing market positive results when all sales categories are compared to August 2011. On a year-over-year basis, total property sales, total dollar volume and average and median pricing all rose.
Month-end pending sales for August totaled 4,298. That is up 8.3 percent from last year and suggests the likelihood of another positive sales month when the September real estate transactions are totaled. Active listings, or the number of available properties, at the end of August declined 16.9 percent from August 2011 to 40,504.
For the first time in more than 10 years, the inventory of single-family homes fell below five months, dropping from 7.1 months a year ago to 4.9 months, a level the Houston market last observed in April 2002. Housing inventory has remained below a six-month supply since December 2011. For perspective, the national inventory of single-family homes is 6.4 months, according to the National Association of REALTORS® (NAR). A supply of less than six months is traditionally defined as a “seller’s market,” however buyers have been reaping the benefits of historically low mortgage interest rates.
Single-Family Homes Update
August sales of single-family homes in Houston totaled 6,600, up 20.0 percent from August 2011. That marks the 15th straight monthly increase and represents the largest one-month jump in single-family home sales since August 2007.
Broken out by housing segment, August sales saw gains across the board, as follows:
- $1 – $79,999: increased 3.5 percent
- $80,000 – $149,999: increased 18.3 percent
- $150,000 – $249,999: increased 22.0 percent
- $250,000 – $499,999: increased 26.6 percent
- $500,000 – $1 million and above: increased 23.9 percent
The average price of a single-family home rose 4.0 percent from last August to $224,464, the highest level for an August in Houston. The highest and second highest average prices of all time were recorded in May and June of this year, respectively. At $165,000, the median sales price for single-family homes also achieved a record high for an August in Houston, increasing 3.8 percent year-over-year.
HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In August 2012, existing home sales totaled 5,745, a 24.8 percent increase from August 2011. The average sales price rose 4.9 percent year-over-year to $214,321. The median sales price increased 5.4 percent to $155,000. Existing homes achieved historically high prices in June of this year ($226,309 average and $161,200 median).
August sales of townhouses and condominiums shot up 28.8 percent from one year earlier. A total of 600 units sold last month versus 466 properties in August 2011. The average price rose 8.1 percent to $170,434 while the median price increased 8.5 percent to $130,850. Months inventory dropped 32.8 percent year-over-year to 5.6 months compared to 8.3 months in August 2011.
Lease Property Update
Houston’s lease property market grew in August. Rentals of single-family homes rose 10.5 percent compared to August 2011, while year-over-year townhouse/condominium rentals edged up 2.7 percent. The average rent among single-family lease homes and townhouse/condominiums retreated slightly from the record levels they hit in July. The August average rent for a single-family home was $1,655 and it was $1,368 for a townhouse/condominium.
Houston Real Estate Milestones in August
- Single-family home sales rose 20.0 percent year-over-year, accounting for the market’s 15th consecutive monthly increase. That marks the steepest one-month sales volume gain since August 2007;
- At $224,464, the single-family home average price reached the highest level for an August in Houston;
- At $165,000, the single-family home median price also reached an historic high for an August in Houston;
- 4.9 months inventory of single-family homes is the lowest level in more than 10 years and compares favorably to the national average of 6.4 months.
- Sales of townhouses/condominiums climbed 28.8 percent year-over-year;
- Single-family home rentals rose 10.5 percent compared to August 2011, while rentals of townhouses/condominiums edged up 2.7 percent.